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I 4 1 1 1 1 -'rectors, of the North Suburban 0 Cabl,e Commission Page Two September 18, 19,86 4, This, indicates biased upon the pro formas that after exist., I years one and two North Clentral will not be In compliance with the loan commitment with the Bank of Boston,. Addition- allyI, the oplerat ing cash f to tol debt. sierv,l*cle ratio is also ,01 IN not met in year one when the ratio required to be at least 1.1 to 1. 'North Central 's ratio, of ople rat iong cash flow to debit service in year one 3LS 1,,,OI 7 to 1,. This indicates, main,, that, North Central would not be in compliance with the fl-- "I nanclal tesits, as-desicribed in the Bank of Boston loan commit- ment letter,. IN In perfoirmi I -ng a financJ-al analysis of these pro flormasil, it is neiciesisary to review all of the assiumptions used in devellop,ing the pro, formas.1 However, the fact that North Central in their pro, formas as submitted is generating neig&- t34i.ve cash, flows, which exceed the clash lanvested into the sys- tem simply indicates that the plan as pirolplosied 'i's not ecio- nomically viable. At this date, even if a detailed review were performed to, determine that the revenues expenses and other assumptions were rep. so nap ile, the o era ll financial plan proposed by North Central would still not be viable. At this time if the analysis were to be completed with- out further d3-siclussion with North Central's management it would be my opinion that North Central "s financial plan is not viable. 'This conclusion is reached on the basis that there is not enough cash invested to fund the acquisition and opleration of the system and due to the fact that the pro foirmas as, submitted would not comply with the financial tests required in the Bank of Boston loan commitment, letter, I -R� a nt =40